Marketing Management Of McDonalds

Organisational Background

Discuss about the Marketing Management of McDonalds.

The reported paper has been developed to identify the market operations of McDonalds, the leading fast food restaurant chain of the world in the Australian target market. By identifying the marketing perspective in the target market, the research study will identify the sustainable marketing strategy suitable for business growth. Meanwhile, the study describes a detail research of the industry including the 5Cs significant for business proposition. The organisational analysis, market research strategy, market development plan and selective marketing tactics of McDonalds have been formulated drawing insights providing suitable marketing concepts and theoretical models (Al-Weqaiyan, 2005). Understandably, the study has been developed based on thorough research supportive for marketing development.

McDonalds is one of the largest convenient foods and beverage restaurant chain business in the world. It has employs around 1.6 million people and has stores in more than 115 countries of the world. It is the market leader in the restaurant chain business with several strong competitors such as KFC and Subway (Reece, 2010). The primary reason for the success of McDonald’s business is its distinctive competitive strategies, high standards of performance, superior quality of products, and high integrity of people. Around 85 percent of restaurants of McDonalds are owned by franchisees.

The mission of the firm is to become the world’s premier convenient food and beverage restaurant business. The company seeks to provide healthy financial rewards to its investors by giving good opportunities for enrichment and growth to its business partners, employees and the communities (Sakas and Konstantopoulos, 2010). The vision of McDonalds is to become a modern and progressive company by delivering its customers a contemporary experience. Modern in the vision statement means to get the brand in the place where it needs to be in today’s market. On the other hand, progressive means to get ready for the future expectations of the customers.

In order to meet the changing demands of the demographics, McDonalds serves its customers with a huge product range that includes burgers, breakfast, beverages, desserts and many other items. The oldest marketing slogan that is still yet used by the company is “I’m loving it!” began in the year 2003. On the other hand, the company keeps on experimenting with its product range by introducing localised foods (Ramachandra, Chandrashekara and Shivakumar, 2010). Currently, the brand McDonalds and McCafe has grown to be the second largest convenient food and beverage brand in Australia. The brand name is itself enough to attract people to visit the McDonalds stores.

Organisational Analysis

A SWOT analysis has been presented to discuss the strengths, weaknesses, opportunities and threats of McDonalds:

• Strengths: The global existence and renowned brand of McDonalds are its primary strengths. Along with that, the successful items and consistency of food quality also acts as strength of the company.
• Weaknesses: It can be seen through the market research that the declining market share and disgruntled franchisees of the company has emerged to be serious weaknesses of the organisation (Mujtaba and Patel, 2011). On the other hand, the slowed income and revenue growth makes it difficult for the firm to expand its business and hold its market positioning.
• Opportunities: McDonalds serves only 1 percent of the entire world population and has a good opportunity to expand over the international market. The joint ventures with retailers and supermarkets provide the company with a lower risked opportunity for expanding its business (Mooradian, Matzler and Ring, 2012). On the other hand, the implementation of technology in its service can help the company retain its customers.
• Threats: The strengths of the competitors are the primary threat for McDonalds. On the other hand, the fluctuation of the currency and global economy makes it difficult for the company to do its customers in the overseas market (Kerin and Peterson, 2001).

In the marketing management, identifying the target customers will be the key to long-run success. In the South Australian market, the target consumers can be identified as the most health conscious as well as fast food loving public. Precisely, the target demographic profile is highly educated and professional to say the least (Slater, Hult and Olson, 2010). Hence, the income status of the target demographics will be a significant boost for the fast food restaurant chain business. Meanwhile, in the busiest life schedule of the target demographic profile including children, school and college goers and single-living public, the customers value quality and tasty fast food and timely delivery of orders (Kotler and Keller, 2016). Therefore, the fast food chain must ensure the quality of service to meet the demand of the target customers. In the marketing strategy, the brand name will be efficiently utilised to create an influence on the target demographics.

In order to create growth in the target market, McDonalds Australia must use their significant supply partners already operating in the other parts of the country. For instance, in the product distribution, Martin Brower can be identified as the major contributor. On the other hand, the beef products, chicken and fish will be supplied by OSI and Australian Food Corporation (Qureshi and Hassan, 2013). Also, Inghams Enterprise, McCain, Simplot and other partners can supply fries, hashbrowns and other food products according to the quality to complete the entire supply chain in the target market. Meanwhile, the quality suppliers can deliver fresh food products and items following the quality audits of the fast food items to maintain the brand identity (Bhuian, 2009). The fast growing fast food industry in the Australian market will be helpful for the business collaborators as well to supply products at a reasonable pricing suitable for company’s profit margins.

In the target market of South Australia, McDonalds will face tough competition from KFC, Subway, Hungry Jack’s, Red Rooster, and Nando’s. Currently, 19.9 percent of market share of fast food restaurant chain industry has been occupied by KFC in Australia. On the other hand, Subway and Hungry Jack’s have got 17 percent and 13.1 percent of the entire market share respectively. Among the most popular restaurant chain, the brand identity of McDonalds will definitely work in favour of the organisation to make further market penetration. As far as other new entrants in the market are concerned, the potential threat of new market entrants will be limited (Mujtaba and Patel, 2011). Precisely, to remain competitive in the target market, the quality of fast food items and trademark food products must be presented orderly to the target demographics (Banks, 2016). Moreover, the product segmentation as well as the market segmentation of McDonalds will be effective to stay ahead in the target South Australian market.

Customers

A PEST analysis has been conducted herein below to present the other factors that influence the business of McDonalds in the Australian market.

• Political Factors: The global operations of McDonalds are influenced by the government policies of each country. For example, there are certain political groups in Australia that protest against fast food due to the health implications such as cholesterol and digestive problems (Kawabata, 2013). On the other hand, the company needs to follow several rules and regulations to operate in a smooth manner.
• Economical Factors: The economic condition of Australia works in favour of the company. The inflation rate in Australia is highly controlled at 1 percent and the good income level of the people provides the firm with better opportunities to expand its business in the country (Kawabata, 2013).
• Socio-cultural Factors: Australia is a multi-cultural nation with a higher proportion of western people. The Australian population mostly favour fast food for their daily living due to the busy schedule of life (Kawabata, 2013).
• Technological Factors: The development of technology has made it easier for a restaurant chain business to effectively conduct all its marketing tactics (Kerin and Peterson, 2001). McDonalds provide free Wi-Fi facility and focus on digital advertising to attract more customers.

In order to collect primary research data from the target market, McDonalds Corporation simply engages renowned research agencies. Meanwhile, the agencies have prepared survey research materials for the selected market area to identify the 5Cs associated with the business structure of the firm (LaPlaca, 2008). By conducting thorough study on the basis of significant methodological consistencies, the market research can define the behaviour of the target demographics, position of the collaborators as well as competitors, threats of new entrants, robust changing business environment and competitive marketing strategy of the other market players. In order to define the customer’s perspective, random survey study has been conducted to know the choices and preferences of the target demographics (Kotler and Keller, 2016). The research outcome will be helpful to define the best product line and services strategy to impress the consumers.

The study research and market intelligence programme on specific market region can collect best information about the localising fast food menus and food items mostly preferred by the target demographics. Thus, positioning strategy of the firm can be structured to get the best response from the target demographic profile (Levy, 2012). Meanwhile, the existing pricing strategy and standard of services of the other market operators can be identified during the study. The research agencies hired by McDonalds to conduct the primary research study will also identify the probability of new entrants by collecting information about the existing market share of the best participants (Abdullah Saif, 2015). Precisely, in the target market, the fast food chain business is a perfect competition. Hence, the entry of a new firm will not make a massive impact on the revenue of the operating firms. Lastly, the role of the collaborators such as the suppliers, distributors and franchisee must be recognised before making any business commitment. Thus, the research on the collaborators will help McDonalds to find the collaborators that can provide quality products at a reasonable pricing (Thomadsen, 2007).

The research study on market will evidently clear out the best segmentation, targeting as well as positioning strategy for McDonalds in the target market as follows:

Segmentation Type	Segmentation Criteria	Target Segment
Geographic	Density	Urban areas
	Region	Domestic market
Demographic	Age	between age group of eight to fifty
	Gender	Males and Females
	Income Status	Low income, middle class income
	Occupation	Students, business professionals and service people
	Life style	Bachelor
		Newly Married
		Family including children
Psychographic	Lifestyle of target demographics	The product line of McDonalds has been targeted according to the preferences of different style of people having diverse set of lifestyle
	Social Class	Lower income class, middle class and hard-working class
Behavioural	Personality	fast food loving careless and enjoying people
	Loyalty of target demographics	Hardcore as well as loyal customers
	Status of target demographics	Regular customers

Identifying the target market is a key to success for business growth. In this study, the South Australian market has been determined to be the marketplace for McDonalds. Clearly, the growth of fast food industry in the Australia has encouraged McDonalds to set up new outlets in the South Australian market (Williams, 2015).

Collaborators

In order to make the finest business growth in the target market, customer value proposition will be the key to success. Precisely, efficient value proposition resonate to target demographics must be defined so that the purchasing behaviour of the target demographics can be highly influenced. Herein, the brand identity of McDonalds, quality food items, smart on time delivery features and magnificent service efficiency of the firm can be represented to construct the value proposition (Bhuian, 2009).

Branding of business is extremely important to stay competitive in a target market. Precisely, McDonalds should focus on the target audience providing the best quality and magnificent services. In the South Australian market, distinctive service benefits must be given to the consumers to increase popularity of the fast food restaurant chain (Mujtaba and Patel, 2011). Moreover, unique pricing strategy and discount offers must be promoted at the marketing level to keep the consumers interested.

A detailed marketing mix has been presented herein below to support the above marketing strategy:

• Product: McDonalds will introduce localised foods with new varieties to attract new customers. On the other hand, it needs to keep on introducing new food range that will retain back old customers (Wilson and Gilligan, 2005). Furthermore, the company will focus on developing its customer service by delivering food at door step and taking online orders.
• Place: The Company needs to expand its business in the South Western Australia by using the franchising or joint venture strategy (Sheehan, 2011). McDonalds has planned to open 100 stores in the South Western region of Australia with all sorts of modern facilities and services.
• Price: McDonalds need to implement a competitive pricing policy in order to fight the high level of competition from KFC and Subway. On the other hand, the company can make use of discount strategy in order to attract more customers (Sheehan, 2011).
• Promotion: McDonalds is involved in digital advertising and need to focus on its target market. On the other hand, the management needs to use several other promotion techniques such as hoardings, transportation advertisement, and several other modern advertisement techniques (Wilson and Gilligan, 2005).
• Processes: McDonalds needs to focus on improving its customer service by employing part time workers to deliver quick service during the rush hours (Kotler and Keller, 2016). On the other hand, the company will also provide home delivery services within a particular range to attract more customers.
• Physical Evidence: In order to deliver physical evidence, the company can provide McDonald’s toys to kids to increase their satisfaction level. On the other hand, free gifts can be given to make people remember about their visit to the McDonalds restaurants (Kotler and Keller, 2016).
• People: McDonalds will hire HR professionals to train the new staffs of the franchisees opening in the new market. Along with that, the company will provide lead chefs and front line managers to the franchisee stores to control the new workforce (Kotler and Keller, 2016). On the other hand, the company will hire part time staffs in order to manage the customers during the rush hours.

Conclusion

During the marketing management of McDonalds in the target market, specific market analyses and potential segmentation of market should be done as discussed in the marketing strategy section. Precisely, in the robust business environment, the brand name of the organisation can play a major role to create brand positioning in an automatic way. Understandably, to meet the demand of the target demographics, the quality of fast food must be delivered to create significant competitive edge in the target market. Also, the differentiation of food products will be handy in the marketing strategy to stay ahead of the rest of the fast food restaurant chain in the target South Australian market.

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